STRATEGIC MANAGEMENT

BMG20803/FMG20203/AMG20203/WMG20303

SEPTEMBER 2022
STRATEGIC MANAGEMENT
ASSIGNMENT 1 (20% Report, 10% Presentation)
TYPE: Group Assignment (6 members per group)
For this assignment, every group is required to submit a report and present their findings. Every
group needs to choose TWO (2) companies from Food Delivery Business. Below is an example of
some of the Online Food Delivery service providers in Malaysia. You can also choose other than
the below companies.

1)Grabfood 7) Delivereat

2)FoodPanda 8)Lolol

3)Shopee food 9)Gemspot

4)Airasia food 10)Beep Delivery

5)EASI (Hungry) 11)Tapau

6)Bungkusit 12)OdaMakan

Course outcome :
CO 1: Understanding the concept of strategic management.
CO 3: Distinguish different strategies management and use all techniques of matching
strategy.

The guidelines shall be referred to followings:

Part Content No of
pages

Introduction ● Background of the TWO (2) companies.

2-5 pages

Content 1. Provide SWOT for the TWO (2) companies. (Must include
APPS comparison advantages & disadvantages between
12-15
the 2 companies chosen from the point of view of the Food
pages
& Beverages operators)

Choose the best company and justify why the company is

the best.

2.1 Analyse industry environment (Michael Porter’s

Five Forces).

2.2 Provide strategies conducted by the chosen

Company.

Conclusion & ● How does the company benefit from the opportunities 2-3 pages
Recommendations of the external environment and avoid threats?

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● Any recommendations

Appendix ● References -

Format:

● Group assignment ● A4 double paper size

● Headings: 14 (Bold), ● Submission Deadline: Report

Subheadings 12 (Bold), Body and Presentation (During
Text, 12 (Normal). Font: Times class) – Week 5: 04/10/2022
New Roman

● Alignment: Justify ● Spacing: 1.5

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TABLE OF CONTENT

DETAILS PAGES

INTRODUCTION 4-6

SWOT ANALYSIS 7 - 16

ADVANTAGES & DISADVANTAGES 17 -18

5 FORCES OF MODEL 19 - 23

ANALYSE COMPANIES STRATEGY 24

EXTERNAL ENVIRONMENT 25

THREATS 26

CONCLUSION & RECOMMENDATIONS 27

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INTRODUCTION
● Background for Shopee Food

Shopee is an e-commerce online shopping platform based in Southeast Asia and it was
founded in the year of 2015 by the SEA group. The headquarters is located in Singapore and
currently has operations in all six of Southeast Asia’s major countries namely Malaysia,
Indonesia,Philippines, Vietnam and also Thailand. Shopee, which is the newly launched
customer market that practices Consumer to Consumer (C2C) business model, had an official
launch in Malaysia back in June 2015. Hence, this company was the first social Market where
everyone can browse, buy and sell. It also offers a wide range of products, complemented
with secure payment methods and innovative inspiration to create more business
competitions and also by providing a much more safe and convenient way for shopping and
sales experience towards the consumer itself. Due to its thriving and convenient way of
selling any items in the application, it definitely lures lots of sellers to venture their business
company in this Shopee platform itself. Over the years, this Shopee platform has indeed
become one of the gigantic ecommerce platform phenomena which quickly dominated the
Southeast Asian market. The main reason that Shopee was able to dominate the Southeast
Asian Market is because the company consists of its four main features which are Shopee
Feed, Shopee Games, Shopee Live and also Shopee Live Chat. As for the first feature which
is the Shopee Feed, the feature allows the sellers to upload posts in the platform. By using
this feature, they are able to create business engagements with the buyers by viewing the
uploaded posts. As for the second feature which is the Shopee Games, it is to provide mini
games such as Shopee Farm, Shopee Bubble and Shopee Go. These mini games usually give
out handsome rewards which can be discounted, extra coins or free shipping vouchers
instead. The third feature would be Shopee Live where users can watch live videos from
sellers. This is to allow users to interact with the sellers upon the item that is being sold. This
live video can be done by commenting during the live and asking questions regarding the
products. As for the fourth feature, it allows both buyers and sellers to communicate directly
regarding the availability of size, color, and measurement or any enquiries of the products. At
first, those were the main features that were offered in the Shopee company. However,
Shopee made a shocking announcement where they wanted to launch its own in-house food
delivery service named as Shopee Food on the date of September 24, last year.

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Before the official announcement was made, the new feature in the application was actually
being publicly available for consumers. The reason is that the company was looking for
delivery riders and eatery partners way back in June 2021. A slight difference from other
countries where they were required to download separate applications for Shopee Food, as for
Malaysia's version of Shopee Food it can easily be accessed through the mainpage of
Shopee’s main app. The service will be rolled out to users in batches, and is set to be
available to over 8 million Malaysians in the Klang Valley in total. To date, it’s onboarded
quite a number of F&B joints including A&W, Burger King, and Tealive along with small-
time hawker food stalls. As for the method to locate a nearby restaurant in the Shopee app is
that the consumer must enable their location in order for it to function well. In conjunction
with the new feature of Shopee add into the market, the company has indeed chosen a great
idea of business by venturing into the food delivery services despite having so many
competitors such as Grabfood, FoodPanda and also AirAsia food and many more. This due to
the food delivery services will always continue to be relevant as people like to eat or drink at
any time and any place.Besides that, this food delivery services provide various workline
either for the professionals worker or college student because this type of job is high demand
and wider growth opportunity even after the pandemic. The recent pandemic wave has indeed
taught us humans to acquire so many new innovative ways in order to stay interacting with
each other without any limitation. Other than that, this food delivery service also offers
varieties of need for consumers. In a simpler way to explain is that, the food delivery services
have made it easy for the consumer to pick on their next meal based on the preferences of
categories. For example, for people that crave Korean food, it is required to type it in the
search space and the app will filter and search for food particular to the demands. Here it
shows that this Shopee application offers a wide range of services from daily essentials to
food delivery services. Therefore, it shows that Shopee really does satisfy user needs and
wants by broadening its services into a whole new level.

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● Background for Air Asia Food

AirAsia is formerly known as a low cost airline company that was established in 1993 with
commenced operations in 1996. However due to the recent pandemic wave in Malaysia, this
AirAsia company decides to venture into a new field which is the food delivery industry.
This official launch of the AirAsia food delivery service was in May 2020 where it was
known as ‘OURFOOD’ but eventually rebranded to “AirAsia Food'' as part of the
airasia.com’s super app. This AirAsia food initial efforts began in March 2020 when all
airline activities were grounded due to Malaysia’s Movement Control Order. Due to that, this
company faces such difficulties that causes them to allow themselves to jump into a totally
different industry. There were many cabin crew from the airline business who decided to join
forces by supporting local businesses through food delivery service underpinned by AirAsia’s
logistics department. The team works closely with 500 restaurants all around Klang Valley.
The Airasia application itself provides the food delivery services which allow consumers to
earn and pay with their BIG points. Besides that, having the right logistics infrastructure and
ecosystem indeed makes the setup of AirAsia food a smooth process. Given the effects of the
ongoing pandemic at that time, this AirAsia food delivery service system practices a zero-
commission model to ensure on helping as many local businesses as they can. AirAsia Food
also created opportunities for the affected crew members to become their delivery partners.
Here, it definitely shows that one of the badly affected industries during the lockdown would
be the airline industry. They were not able to fly for months or even years due to the industry
suffering a very heavy loss each and every day. However, AirAsia still manages to find its
own way on to cope and obtain any profit that they can gain which is by launching a food
delivery service.

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SWOT ANALYSIS

Strengths of Shopee Food

Shopee is a platform for customers to buy things while the seller sells things to the customer.
According to the statistics, Shopee is the most choices online shopping platform and the most
clicked e-commerce site in Malaysia. Shopee was launched on 24 September 2021 to the
public. It was an advantage to Shopee because while browsing for things, people can also
order food from the app. This is like killing two birds with one stone. With only one platform,
it serves multiple functions to the consumers.

Therefore, several strengths of Shopee food would be:

- Variety of choices

Shopee offers a variety of choices of merchants from local to continental dishes, from home-
based to restaurants. This gives their consumer choices of food to order online. The more
choices consumers have, the more frequent they will order from the apps. Although it started
around the Klang Valley area, the choices are mountains.There are many international
franchise restaurants like KFC, McDonalds, also famous like Lim Fried Chicken, Tealive and
Korean chicken vendors. This subsided the cravings of the locals.

- Quality care

The most important key in e-commerce business is to assure consumers that the company
cares about their feedback. In Shopee, consumers can rate the merchant upon every purchase,
they can give feedback about the food and the rider. This shows that Shopee prioritizes
customer satisfaction. Besides, they also give coins (rewards) for every feedback, especially
those submitted with photos and videos. These reviews help attract new customers to
purchase from the merchant also for the merchant to improvise their food and services.

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- Promotions and vouchers from Shopee

Shopee is known as a trendsetter among the e-commerce website to start up monthly

promotions like 6.6, 7.7, 8.8 and so on. Apart from that, there are several types of attractive
vouchers to claim from the apps, like, free delivery, high percentage discount and coupons
from merchants. Delivery cost is a drawback to some people, at times it is half the cost of a
meal. Some find it not worthy. Therefore, Shopee always gives free delivery or discounts on
delivery charge to reduce the end cost towards consumers. This helps attract more consumers
ordering from Shopee food because they can save a lot. They only pay for the food and get
free delivery or they get two sets of food for the price of one set.

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Strength of Airasia Food

Airasia is known as a world affordable airline to everyone. As Covid-19 strikes in early 2019,
they introduced Airasia food to Malaysians in 2020 and 2021 they went to explore the
Indonesia market. Airasia food can be purchased through the SuperApp or their official
websites. While browsing for food, consumers can also follow up with the air tickets
promotions.

The strength of AirAsia food are:

- Inflight meals

Airasia food satisfied the craves of inflight food during the pandemic as everyone was not
allowed to travel, especially the iconic Nasi Lemak Pak Naseer. AirAsia would serve 'Santan'
meals through their very own platform. Consumers can have their favorite inflight meals on
the couch while watching television. There are also other merchants under Airasia food from
cuisines to desserts and mostly are Halal.

- Intercity delivery

In Mid of August, Airasia launched intercity delivery which means they fly the food from
Penang to Kuala Lumpur. This is way different than any other food deliveries platform had
given. There are famous restaurants like Nasi Kandar from Hameediyah, Mee Goreng Sotong
from Bangkok Lane, Jeruk Madu Pak Ali and many other specialties from the food heaven
state of Malaysia. Moreover, although the food flew all the way to Kuala Lumpur, the
delivery fee was only RM5.99. It is so cheap compared to us flying or driving to Penang.
However, it will only be available on Wednesday only.

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- Collect points and redeem

Next, the strength of AirAsia food is that with every purchase, customers get points. They get
to collect points from each purchase with just a registered account. The more they buy, the
more points they can collect. These points can be accumulated and redeemed online not only
for food but also hotels and air tickets. This encourages loyalty among their consumers.

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Weakness of Shopee Food

Besides the strengths and advantages of using shopee food, there’s also a few weaknesses
that have been listed out from the user’s experience itself by using shopee food. First of all is
the price of food. Undoubtedly, yes it can’t be denied that shopee is one of the platforms that
is known for having promos for almost every month and giving vouchers for almost every
user. However, when there are no promos or vouchers given, the price of food is much more
pricey than usual. The price can be considered much higher than its competitors.

Next is the availability of shopee food riders. As a customer, when you order your food
obviously you would want it to be delivered to you as fast as you can. Therefore, delivering
food on time is really important so that your customer will be satisfied with the service that
has been given. There is one of the customers that gave feedback after using shopee food. She
said that she ordered her food but it was rejected a fourth time due to no rider being available
around her area. She further added that it was frustrating for her as she experiences a lot of
food cancellation when she uses shopee food.

Moreover, shopee food is also only available for Klang Valley as for now. This means it is
limited and it only delivers to certain areas only. Besides that, self pick up is also not
available, unlike the other food deliveries that have the options whether to self pick up the
food or by delivery.

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Weakness of Airasia Food

There are also a few weaknesses of Airasia Food. One of them is the delivery time. Unlike
the other applications, airasia food did not allow for immediate deliveries and instead asked
us to select a delivery time. For example, if you wanted to order meals at 12 PM, you would
have to select the most immediate time slot, which is 12.30PM. Obviously people wouldn't
have the patience to wait for too long if they are hungry, however if they wanted to use
Airasia food, they need to order their food at least one hour before their lunch time.

Next, is the delivery radius limitation. Although the service offers a delivery radius of up to
60 kilometers, it now only displays restaurants within 15 kilometers of the ultimate delivery
destination depending on customers location. So this means that, you may only order at any
restaurant within 15 kilometers from your location only. Besides that, the COD (cash on
delivery) payment mechanism is not available. Some customers prefer to pay by cash and
some by using online transactions. I personally think that Airasia food should give the
options to the customers whether they want to pay by cash or by using an online transaction.

A customer also gave feedback by saying that the Airasia food delivery app has a messy
interface and is a laggy app. A customer ordered his meal through the app and when he was
about to pay, the payment process was extremely slow due to extended buffer times between
switching pages on the app. After trying a few times, he managed to pay for his food.

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Opportunities of Shopee Food

New opportunities for Personal Growth

As we can see, food delivery services will continue to be relevant. Food delivery services
provide various work opportunities for professionals because they are in high demand and
have a lot of space for growth even after the pandemic. The pandemic has strengthened us as
we acquire new ways to interact more effectively, and this trend will continue to emerge. In
addition, research and technological innovations have made it possible for ShopeeFood to
continually search for new ways to improve the shopping experience of its users.

Boost Productivity Pre and Post-Pandemic

Food delivery services free up time that was once used to travel for food. With this extra
time, we can spend it on other aspects of our lives, such as work, personal pursuits or even a
break. Naturally, most of us want to maximize our time, and this habit is unlikely to change
even after the pandemic subsides. Not to mention, as competition in the food delivery sector
increases, aggressive promotions have become more common. Therefore, food delivery
services have also become more affordable over time. We foresee that the incentive to use
food delivery services will increase further as people can save more time with lesser costs
incurred.

Cater to Consumer’s Need For Accessibility and Variety.

Being able to filter and search for foods specific to their dietary needs makes such food so
much more available through food delivery services. With the influx of restaurants listings
after the pandemic, food options are set to increase in variety and become more accessible.
For instance, ShopeeFood constantly has merchants that sell a vast array of foods to cater to
their users.

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Opportunities of Airasia Food

First Drone Delivery Service in Malaysia.

All meals will be prepared fresh and air-flown in strict hygienic conditions from Penang to
the Klang Valley on selected days each week, with affordable delivery fees of only RM5.99
per l order. Users have the option of pre-ordering their favorite meals up to 30 days in
advance and daily orders close at 5pm one day before the scheduled delivery day.

For the Affected Crew Members

Following the reinstatement of the Conditional Movement Control Order until early
December, airasia food said it saw a 1,150% increase in order volumes within the Klang
Valley during its previous airasia.com Super Sale in October, which generated more than
500% increase in sales.

Attract More People

Airasia food services is completely different from its core businesses, a low-cost carrier. It
purposely helps small local food and beverage businesses to survive through this epidemic.
Unlike other competitors, Airasia does not levy any commissions to the merchants they work
with. This undoubtedly helps in this difficult time and at the same time attract the attention of
many people.

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Threat to Shopee Food

As Shoppee food is new to the Delivery services, they need to ensure that they are able to
grow their market share by offering Malaysians customers the best and cheaper delivery fees.
There’s a lot of Big Players in the Food Delivery market, Shopee food has to compete with
other Delivery companies such as Grab food, Food Panda, etc. Therefore, customers are free
to choose whatever platform that would benefit and save their money for a cheaper cost. It
will lead to bigger business competition as lots of other platforms provide cheaper fees and
cost. The more the choices, the more the probability of losing a Loyal customer as it makes
the customer base unstable. This kind of matter would eventually put pressure on a
company’s margins and affects their profitability.

Regardless of how large the market may be, if the company are unable to meet the wants of
the customers, it will be useless. Of course, The restaurant workers, not just the delivery
partners, are accountable for the customer satisfaction element in this situation. Therefore,
one of the important things they need to maintain and take care of is the quality of the food to
satisfy the customer. However, It is difficult to bridge the gap between delivery companies
and restaurant owners in order to collaborate and anticipate client needs. Mishandling orders
due to a lack of training is one of the biggest problems delivery drivers deal with. Few food
delivery services have the necessary safeguards in place to guarantee that their drivers handle
food correctly. These are one of the issues that could affect customer’s satisfaction and
somehow drain the profitability of Shopee food.

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Threat to Airasia Food

Every company these days has to adapt with a competitive environment, especially when Air
Asia Food is a new brand in the Food delivery market. Surely, The biggest threat to Airasia
Food is its Competitors, especially Grab and Foodpanda, who. Have become the major player
in the food delivery industry and have been known by Malaysians. Therefore, it is very
difficult for them to prove to their clients that they had better services. The current
circumstances of our market and economy are very tough, the market is competitive, food
ingredients are costly, and people have less affordability. Even the big players are having
hard time maintaining their profitability, let alone newcomers such as AirAsia Food.

Same goes to Shopee Food, The quality of food delivered to the customer could also become
something that could break Customer’s Expectations, which then led to Client or Customer
attrition that is known as Customer turnover. Customer Turnover came from the results of
inability of the businesses to meet the wants of its customers. Therefore, it is vital for them to
maintain and take care of the quality of the food to satisfy the customer even though It is hard
to bridge the gap between delivery companies and restaurant owners in order to collaborate
and anticipate client needs.

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Advantages and Disadvantages of Both Apps as a (Food & Beverage Operator)

From the point of view of a Food and Beverage operator, the advantages of Shopee Food
application is that it offers a vast range of cuisines available from various restaurants and
shops. Through this application, the consumer is able to view any type of menu that they
searched or crave for. The app also filters those restaurants accordingly based on the
consumer’s taste preferences at the moment. For example, if the consumer wanted to eat
sushi which is known as Japanese food, then the advantages of the apps is that they will
narrow down the search into just showing restaurants that sell sushi only, and next they will
just simply click on the amount and pay for it through online payment. This shows that the
technology of these applications is certainly smart enough to understand the customer’s
preferences.

Another advantage for Shopee Food is that the company cares about its service quality. The
reason is because the consumers are highly recommended to give their satisfaction rating to
the merchant upon every purchase. The rate also included their feedback towards the food
and the rider. This clearly indicates that Shopee prioritizes customer satisfaction. Besides,
when a consumer gives their rating with photos and videos, they will be rewarded with
Shopee Coins which can be used for further purchase. Hence, these reviews were designed to
lure new customers to purchase from the merchant and also for the merchant to take note of
their food and services.

Besides that, Shopee Food is also dealing with its disadvantages. One of them would be the
duration for food riders to send the food. There are times when the consumer orders a large
amount of food while the other consumer orders a single amount of food to be delivered.
Here it causes conflict upon the rider when they have to deliver both of the food at the same
time. The consumer that orders a single person amount of food often has to wait very long.
This indeed has caused problems between the company and the consumer itself.

As for AirAsia Food, the advantages would be the merchant is able to control the menu and
the prices. This is because lots of food delivery services apply the rule where they will dictate
the prices whether to be high or discounted. It is a slight difference with AirAsia Food as they
allow the merchant to control the prices based on their gains or losses.

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However, there are disadvantages of using these online applications. The disadvantage would
be the system glitch upon the app itself. It is indeed normal for a technology to be facing
some technical issues but it will definitely cause a lot of problems ahead. As an example
AirAsia food delivery service application once experiences a system glitch, the system itself
requires reboot and it causes loss of losing customer’s data,mismatch or wrong data of orders,
wrong customers and also wrongly assigned drivers. These are the situations that the
consumer had already faced when ordering their food via online application.

As in my own perspective, I would choose Shopee Food as the best company for me. The
reason is because the system is much more familiar. I can easily upload all of my business
posts in the application without any hassle. Hence , the Shopee Food cares about its quality.
The reason is because the consumers are highly recommended to give their satisfaction rating
to the merchant upon every purchase. The rate also included their feedback towards the food
and the rider. This clearly indicates that Shopee prioritizes customer satisfaction. Besides,
when a consumer gives their rating with photos and videos, they will be rewarded with
Shopee Coins which can be used for further purchase. Hence, these reviews were designed to
lure new customers to purchase from the merchant and also for the merchant to take note of
their food and services.

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5 Forces of Model

Rivalry among competing firms

In these modern days, technology is growing more and more. Everything is just at your
fingertips. This applies the same to the food delivering system that we have nowadays. There
are a lot of food delivery apps such as Shoppe food, Airasia food, Food Panda, Grab food and
many more. This will obviously cause rivalry among them. The increase in rivalry is
unhealthy for a business to gain profit. It exhausts a big part of an organization's capital in the
struggle to gain market share. These are some strategies for dealing with rivalry. To begin,
identify and close holes in the customer experience. You may improve your customer’s
experience by taking and listening to their feedback. Feedback needs to be taken seriously as
it is what the customers feels and experienced by using your service. Next, is by creating a
distinct offering category to provide distinctiveness. Try to create something different and
unique that can attract other people to use your service. Besides that, it is innovation.
Innovative items tend to attract an increasing number of consumers. Always try to do
something new that can make people see why they should use your service rather than the
others. Lastly, is by enhancing customer service. Having good customer service is really
important. People will always ask for assistance from the customer service. Therefore, it is
important to have good customer service that can entertain and satisfy your customer needs.
Also, keep in mind that the customer is always right.

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Potential entry of new competitors

The threat of new entrants exerts a significant influence on the ability of current companies to
generate a profit. When new competitors enter into an industry offering the same products or
services, a company’s competitive position will be at risk. Therefore, the threat of new
entrants refers to the ability of new companies to enter into an industry. It depends on the
barriers to entry. The barriers refer to the existence of high costs or obstacles that can deter
new competitors from entering the industry. For example, one of AirAsia Food's advantages
is that it has the first drone delivery service where all meals will be prepared fresh and air-
flown from Penang to Klang Valley which makes it unique. It can be the barriers to other
competitors to entry. As for ShopeeFood, it is known as the cheaper ni shopping platform,
with that, the barriers to entry are higher because of the strong customer loyalty with strong
brand preferences. As we know, quality, pricing and marketing can overcome barriers and
Shopee Food has that with how they advertise their application with all the vouchers and
discounts for their customers.

However, there will be other strategies for ShopeeFood and AirAsia Food to increase the
barriers to entry such as cost advantages which means these companies can easily produce
and offer their food and services at a lower cost or price than that of new entrants. It
automatically attracts more customers. A low threat of new entrants makes an industry
attractive and there are high barriers to entry. Therefore, existing companies are able to enjoy
increased profit potential. But, a high threat of new entrants makes an industry less attractive
and there are low barriers to entry. Therefore, new competitors are able to easily enter into
the industry, compete with existing firms, and take market share. There is a reduced profit
potential as more competitors are in the industry.

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Potential development of sub-products

We are now living in a modern world where there will be more technology driven, even
though most of our activities these days were made online. People are willing to spend on
online delivery food services nowadays as it saves their time and ease of access that they can
enjoy a whole variety of foods. As the day goes by, there will be more companies that come
with substitute products in this industry that are trying to compete to offer their customers the
most low-priced apps. As the relative cost of substitute items falls and switching costs for
consumers diminish, competitive pressures from substitute products grow.

The availability of alternatives place a barrier on the price that may be paid before buyers
choose other alternatives. As a result, when substitute’s prices fall and switching costs for
customers drop, pressure on the organisation as a whole grows. Therefore, these issues would
then lead to high marketing and promotional costs when they are trying to compete with other
companies. Pressure of AirAsia Food and Shopee Food would depend on substitutes that can
be comparable or better in terms of Quality and Performance.

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Bargaining of suppliers

The fourth force in this model is bargaining of suppliers. In shopee, the bargaining power of
suppliers is low similar to Airasia. The bargaining power in most online platforms is lower
due to restrictions by brand owners and code of conduct that has to be followed. When it
comes to online business, the main and most important things they could offer is quality and
services.

Shopee implemented forward vertical integration in their business that includes Shopee food.
In this chain, both the merchant and consumers need each other, food from merchants
delivered to consumers through riders. Shopee is known for aggressive marketing campaigns
like Youtube advertisements, and domineering social media with top influencers. Even 3 year
old kids know Shopee from TV or mobile phones. The company is involved in every process
from managing, operation, monitoring to end result.

Similar to Shopee food, AirAsia food also applies vertical integration models. Its new venture
of food delivery service is taking a slightly different approach in the market. They have their
own registered and trained riders to deliver the food instead of hiring a third party delivery. It
is the most suitable strategy for business that involves food and deliveries to focus in one
demographic area like Klang Valley. Both Shopee food and Airasia food works as platforms
for the sellers and buyers.

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Power of consumers

The idea is that the bargaining power of buyers in an industry affects the competitive
environment for the seller and influences the seller’s ability to achieve profitability. This
means that strong buyers can pressure sellers to lower prices, improve product quality, and
offer more and better services. All of these things represent costs to the seller. A strong buyer
can make an industry more competitive and decrease profit potential for the seller. On the
other hand, a weak buyer, one who is at the mercy of the seller in terms of quality and price,
makes an industry less competitive and increases profit potential for the seller.

As in the Shopee Food, the consumers were given various choices of food to choose from. As
an example, if they find the prices of the food increases, they would try to avoid those
restaurants instead of purchasing it. This shows that the merchants have no option but to
lower down the food prices in order for the consumers to buy from their restaurant.

In the power of consumers' context, it is crucial to personalize your customers’ interactions

with the product and engage with them as individuals. The more personalized their use of
your product, the more difficult it is for them to move to a different option provided by a
competitor.

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Analyze companies strategy

Shopee Food

Being the most popular apps among the e-commerce platform has brought many advantages
to Shopee. Hence, it was so much easier to promote Shopee food compared to other online
food. The strategy used by Shopee food is volume buy. They encourage people to buy in
more volume for a lower price, for instance, by providing coupons of buy one free one
consumer gets 2 meals for the price of one. It would be a great deal to students and people
who enjoy it only during offers.

Another strategy that has been used by Shopee food is by creating an innovative service in
their application. For example, for people who have dietary restrictions. The ability to filter
and search for foods that are particular to their dietary demands increases the availability of
such meals through food delivery services. Food options are expected to expand in variety
and accessibility as a result of the increase of restaurant listings following the pandemic.
Shopee Food always has sellers offering a wide variety of delicacies to satisfy their users.

AirAsia Food

As one of the well-known aviation companies in Malaysia, AirAsia is also part of the
booming food delivery industry across the region, marking its presence starting in Malaysia.
It all started due to the impact of Covid-19 on the aviation sector, which has grounded most
of its planes. The strategy used by Airasia food is technological advantage. By obtaining a
technological advantage, you can often achieve better sales, improved productivity or even
market domination. This can mean investing in research and development, acquiring a
smaller company to gain access to their technology or even acquiring employees with unique
skills that will give the company a technological advantage. For example, the drone delivery
service is different from other companies which make AirAsia Food stand out from others.

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Companies benefits from the opportunities of the external environment

Firstly, both food delivery service companies were inspired by the external environment
which was the spread of COVID-19 wave across the world. This caused a restriction
movement that doesn't allow any person to leave their house unless it is essential. However
the restriction did come to an end after everyone received their vaccination. But the habits of
ordering food via online application has eventually became a norm for everyone. It is when a
study conducted on food ordering trends by cloud-based retail management software
company, Web Bytes, the pandemic has caused a seismic shift for the food and beverage
(F&B) industry where food deliveries and takeaways exceed dine-ins even post restriction
order.

The study shows that deliveries and takeaways contributed a whopping 85 per cent of total
F&B) orders in the last three months of 2021. The study mentioned that "Although Covid-19
standard operating procedures for eateries have gradually eased, dine-in sales are still far
from being back to pre-pandemic levels. The data obtained from our F&B customers'
transactions shows that consumers in Malaysia have adapted their lifestyle and are getting
increasingly used to takeaways and food deliveries.

This definitely shows that the impact of the external environment towards both of these
companies is massive towards the consumer. The reason is because these consumers believe
that ordering food online minimizes their time,energy and also their health. Consumers
especially in Klang Valley do not mind paying more two cents because they do not wish to
face another traffic jam just to go to eat at a restaurant.

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Methods to avoid threat for the business

Firstly, both companies need to Come up with new marketing materials and promotions. The
need to promote their delivery service to every platform such as, print materials like flyers
and stickers, making promotional videos on social media. there. Are lots of engagements on
the internet nowadays. In order to keep. Customers interested, they should have at least one
promo that is active to reward customers.

Other than that, Make it easy for their customers to order food anywhere, anytime. Their
central aspect of the food delivery strategy should be to make their online food service
available to as many potential customers as possible. Therefore, the ordering process should
have been as easy and intuitive as possible to increase the apps website traffic. No extra
clicks, no menu hidden away in your website’s footer.

Lastly, they should create Quality Assurance System whereby there would be action taken to
restaurants that continuously having a low rate and a bad review on the food delivery website.
This is to ensure that both company maintain the quality of foods by placing only the best-
quality restaurant to avoid matters pertaining the bad quality of food and so on. With this
kind of system, people will eventually stick to one delivery app that they think is worth using.
The better the quality of a company, the stronger the competitive position in the industry.

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Conclusion & Recommendation for these company

In conclusion, both Shopee food and Airasia food have their own advantages and
disadvantages. Both are just as good as they are but however, something needs to be changed
so that the customers will be more satisfied with the service provided. I would like to
recommend Shopee food to cover up more delivery areas. As for now, Shopee food only
deliveries around Klang Valley only. By adding more delivery areas, I think it can help to
boost the sale of it as people like to use shopee because of its vouchers and cheap price of
food. Besides that, they should also add up the number of shoppe food riders. Shopee food
has a very limited number of riders and because of that people don't want to order their food
from them as it will take a lot of time for their food to be delivered to them. So, by adding
riders would be much easier not only for the customers but also for the other riders as well as
they don't need to be in a rush or be in a hurry to deliver food from one to another.

As for the Airasia food, I would like to recommend them to give the options to their
customers for immediate deliveries. People always need their things to be fast, especially
when it comes to food. People don't like to wait when they are hungry. Therefore, they need
to change the delivery system so that customers do not have to wait for an hour for their food
to be delivered. Moreover, Airasia food needs to improve their food app. There are a lot of
customers that have complained that their food app is very laggy. They face a lot of
difficulties whenever they try to order using their app. Airasia food should fix this matter
right away so that the customers won't face the same difficulties when they want to order for
their food.

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REFERENCES

1. Yusoff, M. & Amayreh, Khalid & Ismail, R.C. & Hatamleh, Amer & Karim, Rashed
& Mohamed, Rajina & El-Ebiary, Yousef. (2021). Food and Beverage in Covid-19,
Shopee in Online Shop Brooklyn.Store. Annals of the Romanian Society for Cell
Biology. 25. 7746-7753.

2. https://www.nst.com.my/lifestyle/bots/2022/03/784553/tech-consumers-still-prefer-
deliveries-and-takeaways-post-lockdown

3. https://www.spaceotechnologies.com/blog/online-food-ordering-system-advantages-
disadvantages/

4. https://blog.boxme.asia/3-key-factors-to-answer-why-shopee-is-successful/

5. https://learn.marsdd.com/article/bargaining-power-of-buyers-porters-five-forces-
analysis/

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